Canada’s Most Valuable Mall Acquires Apartment Buildings

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The owner of Canada’s most valuable mall plans to add apartment buildings to this property and two others around Toronto, creating mixed-use neighborhoods that invite tenants to live where they shop.

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Oxford Properties Group plans for high-rise rental apartments at Yorkdale Shopping Center, Canada’s most productive mall in terms of sales per square foot, are in their early stages, said President Michael Turner. But construction has started at Square One Mall in neighboring Mississauga, he said, and city officials are evaluating a proposal for downtown Scarborough in east Toronto.

“We’re starting to get vertical,” Turner said Tuesday in an interview at Bloomberg headquarters in New York City. “I can assure you that what you see today is not what they are going to look like for the next ten or twenty years.”

Intense competition from e-commerce retailers and the loss of business caused by pandemic closures have pushed several North American shopping center operators out of business. The erosion of traditional shopping center activity has prompted more and more operators to add homes to their properties, tapping into an area of ​​the real estate market that has outperformed retail.

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The idea was seized by shopping center giants, including Canada’s Simon Property Group Inc. and Brookfield Asset Management Inc., with two main motivations: to drive more value from properties and to bring potential clients closer to the stock.

But getting city councils to approve the rezoning needed to build housing has been a slow process in Canada, Turner said.

“I didn’t understand why things were going slowly until I started working for a developer,” Turner said, lamenting the “hundreds of meetings” with city officials and citizens and the “many times you have to. redo plans on the same site. “

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Yet as much of Canada suffers from a severe housing shortage, making housing affordability a major political issue, Turner said he is confident that demand will be plentiful for new apartments whenever the need arises. ‘they will be built. Turner said Oxford’s role as the real estate investment arm of the Ontario Municipal Employee Pension Fund means it can operate over a longer horizon than other developers and can afford to be patient.

Yorkdale Mall will be the last of the Toronto-area malls to lead the way, in part because it’s located in a densely populated neighborhood that’s wedged between two major freeways, Turner said.

Yorkdale had sales of $ 1,964 (US $ 1,577) per square foot in 2019, last year the Retail Council of Canada ranked shopping malls across the country ahead of the pandemic. This compares to $ 1,108 per square foot for Square One and $ 870 per square foot for Scarborough Town Center.

Bloomberg.com